The Resolution notifying the constitution of Financial Sector
Legislative Reforms Commission (FSLRC) was issued today by the Government of
India

The Resolution notifying the
constitution of Financial Sector Legislative Reforms Commission(FSLRC) was
issued today by the Government of India. This is in pursuance to the
announcement made by the Union Finance Minister Shri Pranab Mukherjee in his
budget speech of 2010-11 to rewrite and
harmonise financial sector legislations, rules and regulations. This had become
necessary as the institutional framework governing India’s financial sector was built
over a century.

The composition of the Commission is as follows:

Justice (Retd.) B. N. Srikrishna

Chairman

Justice (Retd.) Debi Prasad Pal

Member

Dr. P.J. Nayak

-do-

Smt. K.J. Udeshi

-do-

ShriYezdiH.Malegam

-do-

Prof. JayantVarma

-do-

Prof. M. GovindaRao

-do-

Shri C. Achutan

-do-

ShriDhirendraSwarupMember Convenor

Joint Secretary, Capital MarketsNominee Member

Shri C K G Nair is Secretary to the Commission.

The budget announcement
was made with a view to rewriting and streamlining the financial sector Laws,
Rules and Regulations to bring them in harmony with the requirements of India’s fast
growing financial sector.

There
are over 60 Acts and multiple Rules/Regulations in the sector and many of them
date back decades when the financial landscape was very different from what is
obtaining today. Large number of
amendments made in in these Acts over time has increased the ambiguity and
complexity of the system.

The Commission would simplify and rewrite financial sector legislations,
including subordinate legislations, to achieve harmony and
synergy among them.This will remove ambiguity, regulatory gaps and overlaps
among the various legislationsmaking them more coherent and dynamic and help
cater to the requirements of a large and fast growing economy in tune with the changing
financial landscape in an inter-connected financial world. In the long-term, it
would help usher
in the next generation of reforms, contribute to efficient financial intermediation enhancing the growth potential of the
nation.

The Terms of Reference of the Commission
include the following:

(i)Examining
the architecture of the legislative and regulatory system governing the
Financial sector in India,

(ii)Examine if legislation should mandate
statement of principles of legislative intent behind every piece of subordinate
legislation in order to make the purposive intent of the legislation clear
andtransparent to users of the law and
to the Courts.

(iii)Examine if public feedback for draft subordinate
legislation should be made

mandatory, with
exception for emergency measures.

(iv)Examine prescription of parameters for
invocation of emergency powers where regulatory action may be taken on ex parte basis.

(v)Examine the interplay of exchange
controls under FEMA and FDI Policy with other regulatoryregimes within the financial sector.

(vi)Examine the most appropriate means of oversight
over regulators and their autonomyfrom
government.

(vii)Examine the need for re-statement of the law and
immediate repeal of any out-dated legislation on the basis of judicial
decisions and policy shifts in the last two decades of the financial sector
post-liberalisation.

(viii)Examination of issues of data privacy and
protection of consumer of financial services inthe Indian market.

(ix)Examination of legislation relating to the role
of information technology in the delivery of financial services in India, and
their effectiveness.

(x)Examination of all recommendations already made
by various expert committees set upby
the government and by regulators and to implement measures that can be easily
accepted.

(xi)Examine the role of state governments and
legislatures in ensuring a smooth inter-state financial services infrastructure
in India.

(xii)Examination of any other related issues.

The Commission’s headquarter would be in Delhi. The Commission will submit its report
to the Union Finance Minister within 24 months.

The first meeting of the Commission is scheduled to be
held on 5th April 2011.